Approximately 150 franchise restaurants in the Gulf Coast region were closed for one or more days during the third quarter as a result of the impact of Hurricanes Katrina and Rita, and have either already reopened or are expected to reopen in October. An additional seven franchise restaurants were closed as a result of the impact of Hurricane Katrina and are not expected to reopen for an extended period of time.
The lost sales attributable to the temporarily closed restaurants were estimated to negatively impact reported system-wide comparable sales by approximately 1.0% for September and by approximately 0.4% for the quarter. The impact of the ongoing temporary closure of certain of these restaurants on October comparable sales results is not expected to be significant. The seven franchise restaurants not expected to reopen in the near future have been counted as closed units in the third quarter restaurant progression and their results have been excluded from the reported comparable sales results.
Total system-wide international sales increased 9.7% for September and 12.4% for the quarter, on a constant U.S. dollar basis, over the comparable periods last year.
At September 25, 2005, there were 2,894 Papa John's restaurants (572 company-owned and 2,322 franchised) located in 49 states and 19 countries. Papa John's also franchises 113 Perfect Pizza restaurants in the United Kingdom. For more information about the company, visit Papa John's at http://www.papajohns.com.
Except for historical information, this announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect management's expectations based upon currently available information and data; however, actual results are subject to future events and uncertainties, which could cause actual results to materially differ from those projected in these statements. Certain factors that can cause actual results to materially differ include: the uncertainties associated with litigation; increases in advertising, promotions and discounting by competitors, which may adversely affect sales; new product and concept developments by food industry competitors; the ability of the company and its franchisees to open new restaurants and operate new and existing restaurants profitably; increases in or sustained high levels of food, labor, utilities, fuel, employee benefits, insurance and similar costs; the ability to obtain ingredients from alternative suppliers, if needed; health- or disease-related disruptions or consumer concerns about the commodities supplies; economic, political and health conditions in the countries in which the company or its franchisees operate; the selection and availability of suitable restaurant locations; negotiation of suitable lease or financing terms; constraints on permitting and construction of restaurants; higher-than-anticipated construction costs; hiring, training and retention of management and other personnel; changes in consumer taste, demographic trends, traffic patterns and the type, number and location of competing restaurants; federal and state laws governing such matters as wages, working conditions, citizenship requirements and overtime; and labor shortages in various markets resulting in higher required wage rates. The above factors might be especially harmful to the financial viability of franchisees in under-penetrated or emerging markets, leading to greater unit closings than anticipated. Increases in projected claims losses for the company's self-insured coverage or within the captive franchise insurance program could have a significant impact on our operating results. Our international operations are subject to additional factors, including currency regulations and fluctuations; differing cultures and consumer preferences; diverse government regulations and structures; ability to source high-quality ingredients and other commodities in a cost-effective manner; and differing interpretation of the obligations established in franchise agreements with international franchisees. Further information regarding factors that could affect the company's financial and other results is included in the company's Forms 10-Q and 10-K, filed with the Securities and Exchange Commission.
CONTACT: Papa John's International, Inc., Louisville
David Flanery, 502-261-4753
SOURCE: Papa John's International, Inc.